It all depends on your financial situation and the premium between renting and taking a property on mortgage really. Also lets not forget one's personal circumstances and the property market of the area you are buying into

However IMO I would say buy rather than rent if you can afford to. Buying a house with a mortgage is like renting but with a fixed asset at the end for yours to keep.

Originally Posted by epitaph
Which is better in general in terms of long-term net worth?

Heard cases for both.

Remember Mufi saying he rents himself and rents out his house.

And heard multiplexes are the best since they pay for themselves monthly (if 30 yr mortgage) once you rent out the remaining rooms and units.

Basically, trying to decide between:

- Keep renting
- Buy a condo and lease the other room
- Buy a house and lease other rooms
- Wait, save up more, and buy a duplex/triplex

I haven't bought yet. hopefully this year InshaAllah.

thing is in US, real estate has become very hot. prices are slightly inflated. I should have bought it last year. so right now its a seller's market. inventory is low and demand is quite high (good economy, fear of rising interest rate).

But owning is the right option, if your current rent will be equal to your future mortgage. you are building equity.

but as yankees said, it's all relative based on the market you are at. it is not consistent across the board but do note that mortgage rate will only go up in the next few years. do your due diligence and start looking at some places.

I bought a house but ended up selling it for profit after about 6 years. Now in the market to buy again. While buying is the sensible choice since the mortgage sort of forces you to save towards owning an asset, one must always keep in mind the resale market of the property in case your economic situation becomes significantly better and you want to move to a better neighborhood that seems out of reach at the moment.

Originally Posted by Jadukor
I bought a house but ended up selling it for profit after about 6 years. Now in the market to buy again. While buying is the sensible choice since the mortgage sort of forces you to save towards owning an asset, one must always keep in mind the resale market of the property in case your economic situation becomes significantly better and you want to move to a better neighborhood that seems out of reach at the moment.

Originally Posted by Yankees
Where did you buy and why did u decide to sell?

Bought in Thailand. The housing market was soft right after the massive flooding in 2011 and i took the opportunity to buy at a relatively lower price. Over time i felt that i could afford a better house in a better neighborhood and took advantage of the upswing in price due to the start of a metro rail connection and construction in my area. My plan now is to invest the profit and a sizable capital at once in a new property to reduce the mortgage loan amount as well as the interest.
Another advice i would give is to always look to refinance your long term loan if you notice better/lower mortgage rates. I did that to bring down my interest after 3 years through a different bank.

Originally Posted by Jadukor
Bought in Thailand. The housing market was soft right after the massive flooding in 2011 and i took the opportunity to buy at a relatively lower price. Over time i felt that i could afford a better house in a better neighborhood and took advantage of the upswing in price due to the start of a metro rail connection and construction in my area. My plan now is to invest the profit and a sizable capital at once in a new property to reduce the mortgage loan amount as well as the interest.
Another advice i would give is to always look to refinance your long term loan if you notice better/lower mortgage rates. I did that to bring down my interest after 3 years through a different bank.

that's interesting. Are you a permanent resident of Thailand? With the rate that SEA is developing, it would be fun to buy something in Thailand, Philippines, Indonesia, and just hold onto it. Sounds like you've got the right idea.

I've been looking at buying something in NYC area. It seems to be a sellers market now, so I'll hold off for now. But curious what others with more experience thinks of the market now.

I'm single and looking at it as an investment, so solely looking at multi-units. I'm not even considering living there.

For NYC, I think its as safe of a bet as can be. The only downside I see is having to deal with tenants and the general upkeep needed. Not to mention tenants have too much power in this city. Am I wrong?

Dream: Triplex, build a tiny house in backyard and rent it out too, an aquaponics garden in a greenhouse at the other end, sell microgreens to restaurants. Maybe even sell worms (will have them for garden anyway) and keep bees. Part-time farmer, part-time landlord hehe.

Right now, cheapest condos here are $100k. Sellers market but people are moving into the city.

Buy a condo now or do nothing and wait for next recession to buy a multiplex. Decisions, decisions...

I rent by choice. It is not a good financial move but it gives me a lot of freedom. My current monthly rent is 1800, if i buy and the area and type of house I would move into my monthly mortgage will go into 4000 to 4500/mo. While living in one location more than 5 years automatically makes purchasing a better choice - there are other factors ppl don't consider. Lifestyle.

That's 2000 dollars a month extra I have to pay just to have a roof over my head and that ties up the money in an illiquid asset and will not allow me to take vacations or do whatever I want to do at any given moment.

I enjoy this freedom. I do not believe in living in the closet to save money and spend it when I am old. It doesn't fit well with me.

In my opinion and above average analysis, buying is always better. But one can not give advice on individual situations..

Another point is - buying should happen when you are ready. NOW. Just like stock market. You can not time it. Housing goes through cycles and it is difficult to predict when is the right time to buy. NYC is an international market, not a "local" market if that makes any sense. So even if housing prices outpaces significantly any increase in salary of locals - it is not necessarily an overvalued market..

for ex: A lot of developments in Jamaica Queens where a massive Bangladeshi ppl stay - lot of these are financed by wealthy ppl from Bangladesh. Not local bangladeshis/ppl. And these demands for space keep the prices shooting higher and higher. And that is the case all over NYC with ppl with money from china, india, russia are looking to "diversify/legitimize" their wealth.

4 years ago, I offered for a house in queens with 740K, a chinese buyer offered 770 cash. I backed out as there is no way i can compete with someone who can pay that much money with cash. That property currrently is valued at 1.4 million. And that is the story of my life.

It is not overvalued - you are just competing globally - which makes it very tough... just have to have a little bit of luck on your side sometimes.

By luck i mean if for that house there were no outside cash buyer, the owner would have countered my offer and i would have gone up maybe another 15 to 20K and settled because i really liked that house. But with the cash buyer it becomes a bidding situation - and I wasn't gonna win with my w2 earnings against those type of investors

IIRC, the argument for renting over owning is if you invest the money you otherwise would put into mortgage, you will/can come out ahead in the end. And ofc mortgage isn't the only expense, you've taxes and maintenance costs.

Originally Posted by epitaph
IIRC, the argument for renting over owning is if you invest the money you otherwise would put into mortgage, you will/can come out ahead in the end. And ofc mortgage isn't the only expense, you've taxes and maintenance costs.

that is a poor argument and doesn't factor in leverage. That is important in market like NYC/California.

If you put in 100K downpayment for a let's say 800k house. The percentage appreciation of the house is on the 800K not your 100k giving you a significan't leverage.

if house prices goes up 3% in one year (which is historically the rate at which it apprecaites annually for some market ). that's 24K apprecaition. But if you invest outside you would need to have 24% appreciation else where to get to that 24K.

That is called leverage and all the calculations never count that.

--

the queens house in my example... the house only doubled in value. But my initiall investment for that house would be 150K or so...I would need to have 500% return to catch up to waht I would have made with the house in 4 years vs only slightly less than 100% gain..

Originally Posted by iDumb
that is a poor argument and doesn't factor in leverage. That is important in market like NYC/California.

If you put in 100K downpayment for a let's say 800k house. The percentage appreciation of the house is on the 800K not your 100k giving you a significan't leverage.

if house prices goes up 3% in one year (which is historically the rate at which it apprecaites annually for some market ). that's 24K apprecaition. But if you invest outside you would need to have 24% appreciation else where to get to that 24K.

That is called leverage and all the calculations never count that.

--

the queens house in my example... the house only doubled in value. But my initiall investment for that house would be 150K or so...I would need to have 500% return to catch up to waht I would have made with the house in 4 years vs only slightly less than 100% gain..

I'm not in NYC/California.

3% is the average inflation rate. If your investment grows at 3%, you're not making any money.

Think those calculations are based on national average, not booming real estate places.

If you live in a place where real estate is forever booming and property appreciates at an attractive rate, then it's obviously better to own then rent.

Originally Posted by iDumb
that is a poor argument and doesn't factor in leverage. That is important in market like NYC/California.

If you put in 100K downpayment for a let's say 800k house. The percentage appreciation of the house is on the 800K not your 100k giving you a significan't leverage.

if house prices goes up 3% in one year (which is historically the rate at which it apprecaites annually for some market ). that's 24K apprecaition. But if you invest outside you would need to have 24% appreciation else where to get to that 24K.

That is called leverage and all the calculations never count that.

--

the queens house in my example... the house only doubled in value. But my initiall investment for that house would be 150K or so...I would need to have 500% return to catch up to waht I would have made with the house in 4 years vs only slightly less than 100% gain..

After reading this post properly (you could've put all that in one paragraph), it makes even less sense now.